State Rules for Bank Brokerages Advance
Winokur, Cheryl, American Banker
Securities regulators are gearing up to present states with model rules for securities sales at banks and other financial institutions.
The latest version of the guidelines, from a committee of the North American Securities Administrators Association Inc., will be submitted to its board in early October, said Thomas E. Geyer, the committee chairman. Mr. Geyer is commissioner of the Ohio Division of Securities.
The proposal would then be voted on by the NASAA's 65 members, who include state securities regulators.
The draft guidelines closely resemble regulations implemented in February by the National Association of Securities Dealers. They also contain passages from the "Interagency Statement on Retail Sales of Nondeposit Investment Products," a joint memo by federal regulatory agencies, which focused on bank brokerages.
Mr. Geyer said he hoped the guidelines-which deal with issues such as standards of conduct, customer disclosure, and communications with the public-would encourage states to adopt uniform regulations. Only a handful of states have laws on the sale of securities at financial institutions, he said.
Observers supported the committee's efforts and said that tailoring state regulators' guidelines to federal rules would reduce confusion. "It's very expensive to comply with multiple rules and very time-consuming and cumbersome," said Melanie L. Fein, a banking lawyer with Arnold & Porter, Washington.
Model rules for states have been under consideration since about 1994, Mr. …